BSE Sensex today plunged over 426 points, the biggest drop in about 5 months, on massive selling across stocks on rising uncertainty ahead of the RBI policy meet and a global sell-off linked to US tapering fears.

All 12 BSE sectoral indices ended in the red. Rate-sensitive realty, banking, metal and auto were among the hardest hit.

After dropping 240 points in the previous session, the BSE benchmark BSE Sensex plunged by 426.11 points, or 2.02 per cent to end at 20,707.45, its biggest single-day fall since September 3, 2013 when it sank by over 651 points.

Seeking to assuage investors worried over declining value of the rupee and falling stock markets, the Finance Ministry today said India's economic fundamentals are "very strong" and there is no cause for concern.

The 50-share National Stock Exchange index NSE Nifty dropped by 130.90 points, or 2.09 per cent, to end at 6,135.85, after touching an intra-day low of 6,130.25.

"Weak international cues and rising Indian rupee against US dollar rates are among some key factors that are triggering selling pressure in Indian markets. Uncertainty is also created by upcoming events such as RBI policy meeting and FOMC meeting," said Milan Bavishi-Head Research, Inventure Growth and Securities.

Sectorally, the BSE Banking sector index dropped by 3.97 per cent. However, the biggest loser was the Realty sector index which slipped 6.82 per cent. The Metal index slid 3.81 per cent and Auto index lost 3.33 per cent.